Stacy Williams is a virtual paralegal doing business in New York City under the name Prompt…

Stacy Williams is a virtual paralegal doing business in New York City under the name Prompt Paralegal Service. She employs her daughter as a secretary. Stacy works mainly for attorneys who need extra help in the area of litigation support. She has her own office space and attorneys deliver work to her over the Internet.
One afternoon, Stacy was contacted by Tim Hemstreet, an attorney with an office in Washington, D.C. He asked Stacy for some help on a case he had in New York City. He asked Stacy to prepare a complaint and some interrogatories for him. He was impressed with Stacy’s abilities and soon gave her more work. One morning, Hemstreet telephoned Stacy with a proposal. Tim wanted to develop a New York City clientele and needed a branch office. He proposed to use Stacy’s office as a New York branch office. He would list Stacy’s office address as a branch office and would split office expenses with her. Stacy could still be a virtual paralegal and work for other attorneys, but Tim wanted her to make his cases her first priority.
Stacy agreed. The first thing Stacy did was take down the sign in front of her office that read
“Prompt Paralegal Service” and exchanged it for a sign that said “Law Offices.” If someone should walk in looking for an attorney, the secretary would direct the client to Stacy, who would interview the client, prepare a fee agreement, and get the case started for Tim.
Tim was busy with his Washington, D.C., cases and was never in the New York City office. Stacy handled all his New York cases. She prepared complaints, answers, motions, and discovery. She e-mailed drafts of the documents she prepared to Tim for his approval and review. Tim would okay the documents and instructed Stacy to sign the pleadings for him. When Stacy complained about signing his name, he sent her a signature stamp of his signature so that all she had to do was stamp the document with the signature stamp. Soon, he became so confident in Stacy’s abilities that he told her not to bother e-mailing the documents to him for his review. He was too busy to look them over. He told her to just sign the pleadings and file them with the court.
Tim made all the court appearances, but Stacy did all the rest of the work for his New York clients.
a. Did Stacy violate any ethical guidelines? If so, what are they?
b. Did Tim violate any ethical guidelines? If so, what are they?
c. If the State Bar of New York learned of Stacy’s and Tim’s arrangement, would it do anything to Stacy? To Tim? What?